The global supply chain is in disarray due to the new pneumonia epidemic, resulting in the production and distribution costs of various products continue to rise; although so far there has not been a major impact on consumers’ wallets, but sooner or later companies will pass on the increased costs to customers, driving up inflation.
U.S. manufacturing giant 3M has said that freight costs are rising, Mattel toy company also said the price of plastic; mainland China due to rising prices of chemicals and metals, so that the production costs of furniture and other products rise; some Chinese toy wholesalers have increased the selling price of 15%, producer prices have also risen.
Observers pointed out that when the epidemic spread around the world last year at the beginning, the manufacturing industry is expected to go downhill, so cut back on production; now the epidemic is expected to recede, economic activities have been unblocked, coupled with the expansion of fiscal spending in various countries, consumer spending is expected to continue to increase, so that the demand for some products will be super strong. The manufacturing industry was caught off guard, resulting in an oversupply of products.
Logistics barriers are also increasing the shortage of products. The shortage of empty containers in the shipping industry has led to high transportation rates and operating costs; it has increased supply chain costs and delayed deliveries in many regions. Delays in the supply of one place, dragging down the next, resulting in production delays, higher product prices, and longer delivery times. Some manufacturers to reduce their own uncertainty about the supply of components, have accumulated inventory, making product shortages more serious, but also the entire industrial supply chain of inflationary pressure are aggravated.
Consumers have not yet felt the significant increase in inflation, because the increased costs are still absorbed by the production and distribution industry, but consumers will also pay the price. To electric vehicle batteries, for example, lithium carbonate and lithium hydroxide and other chemical raw materials have increased by 60%, which may push up the price of batteries, or at least make the price does not fall, which also makes the price of electric vehicles to small not easy. The industry to maintain product prices, but also may still use the lower cost of the old technology.
Experts pointed out that the industry is not expected to supply chain chaos in the short term can be resolved, coupled with freight rates and raw material prices continue to rise, the cost will eventually be reflected in the final product selling price, leading to higher inflation.
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